Washington Cannabusiness Association (WACA) membership engages each year in a process to identify and prioritize legislative and regulatory priorities for the upcoming legislative session. For 2020-2021, these priorities were shaped by the ongoing economic instability of COVID-19.

Oppose Labor Requirements that Threaten Job Preservation, Growth, and Economic Certainty

WACA supports community values when it comes to respecting employees, living wage jobs, and working families, but continues to encourage a realistic evaluation of its industry in proposals to impose new and additional regulation/standards upon struggling small businesses. Operational for less than a decade in Washington, ongoing systemic change and a lack of resolution on the federal level when it comes to safe banking and a tax burden unlike any other industry all create unique and high levels of uncertainty in the cannabis industry relative to its peers. Additional mandatory labor standards that ignore this reality - on top of a regulatory framework that is in flux - cannot be successful if they actually reduce jobs and job creation.

Identify, Define and Strengthen Meaningful Social Equity in the Licensed Marketplace

WACA members are committed to being meaningful participants in efforts to establish equity in the licensed, regulated cannabis industry while also upholding the integrity of the I-502 system. We welcome engagement in the dialogue to correct flaws in the existing system which failed to recognize the impact of inequity on black and brown communities when it comes to cannabis businesses.

Oppose Additional Excise Taxes

Our state’s cannabis industry is proud of our sector’s significant tax revenue contributions to critical local and state services. At 37%, Washington State currently has the highest cannabis excise tax rate in the country in addition to the unique federal tax burden borne by all cannabis businesses nationwide. As we work to stabilize the developing industry, WACA opposes any new cannabis tax increase.

Overhaul the Traceability System

After eight years and one vendor change, Washington’s centralized traceability software system is still not working properly. WACA supports consideration of successful systems such as in Canada, where a robust report and auditing system has worked since its inception. This improvement would align the cannabis sector with other regulated industries (e.g. alcohol, liquor), where a self-reporting system informs regulators. The cannabis industry in Washington consistently ranks among the highest that the WSLCB monitors when it comes to compliance. It is a reasonable expectation that the cannabis industry will continue to uphold its high standards and enable the entire industry, regulators included, to retire the historically flawed state-run centralized traceability software system once and for all.

Reinforce Public Policy that Protects Public Health and Safety

While the intention to develop policy that helps address addiction, mental health, and harmful substances is laudable, proposals to cap “potency” in cannabis products will have unintended consequences that pose a threat to public health and are not founded in science. Thorough, science-based research and increased understanding of cannabis, its properties, and the nature of processing it is needed before the legislature acts on the isolated concept of “potency.” WACA will oppose injudicious “potency” measures on cannabis products that are a risk to adult use and medical cannabis patients but will continue to strongly support efforts that undermine the illicit market, which traffic in unsafe, untested and illegal products proven to hurt people.

Improve Efficiency in the System by Eliminating Sub Lots

WACA and legislative leaders promoted legislation to remove sub lotting requirements, which are exceptionally complex, and tantamount to tracking which slices of which apples picked from an orchard on a particular day were used in apple pies delivered and sold in which stores across the state. Sub lotting requires tracking of unnecessary minutiae and results in increased costs with no benefit to public health or safety. WACA will proceed with collaboration with the WSLCB and third-party software systems to eliminate sub lotting.

Empower Small Businesses to Invest in their own Success to Grow and Thrive

Washington may have been one of the first to get into the cannabis market, but we will languish and begin to diminish in influence if frontline innovators of our industry cannot grow, evolve, and develop. Of the 34 states with some form of legal cannabis, Washington and Alaska are the only states that have restricted investment to only in-state residents – a barrier not faced by any other industry. WACA continues to support easing restrictions on access to capital in order to facilitate opportunities for licensees to grow their business, provide stable jobs and contribute to the state economy.

Maximize Opportunity for Licenses Producers and Processors by Increasing their Footprint

Washington’s three-tiered canopy system has stunted many Washington cannabis growers from expanding their business in Washington. A recent study by the WSLCB revealed that there are several license holders who do not use all – in some cases, they only use a fraction or none at all – of their allotted canopy, despite rules that require utilization of at least 50% of licensed canopy or risk having the license tier reduced (e.g. from Tier 3 to Tier 2). WACA supports updating the system to reallocate unused canopy to producers who can prove they can responsibly increase their existing canopy to strengthen their business OR allow those active producers to hold more than three licenses.

Implement and Uphold Consistent Enforcement of the Licensed Industry

WACA is fully engaged on full and complete implementation of ESSB 5318, which outlines systemic reform of the enforcement regime of cannabis. This legislation mandates comprehensive change in how WSLCB enforcement activities are conducted.

Support Medical Patients

Work in collaboration with the cannabis patient community to identify ways WACA can support their efforts. In addition, WACA will also look for ways to raise more money for the WACA Medical Access Fund.

Seek Clarity of Regulations Related to Hemp, Hemp Derived Products, CBD Infused Edible Products, and CHABA and Intersections with the Regulated Cannabis Market in Washington.

In 2019, Washington State passed legislation creating a commercial hemp program in Washington to implement the federal Farm Bill. There has been considerable confusion related to federal and state regulation of the commercial hemp market and the intersection, if any, with the legal cannabis market in Washington state. WACA will work with WSDA and the WSLCB to seek clarity on how these two markets do and do not intersect.

Streamline Regulatory Compliance

While the scant years the regulated marketplace has been running in Washington have resulted in 10,000 jobs and over a billion dollars benefiting the state economy, there is considerable improvement needed to update and align the system with what we have learned since 2012. WACA will collaborate with elected officials and the WSLCB to ensure the regulatory framework reflects the maturity of the industry, reduces unnecessary regulatory oversight, and eases business processes including but not limited to the following topics:

 

Update	System Flaw	Recommended Update
Signage Requirements	There is confusion as it relates to signage requirements for retailers.	WACA will pursue the clarity and direction necessary for licensed retailers to meet WSLCB rules on exterior signage.
Change Requests	Minor administrative changes can take several months to process and be approved by the WSLCB.	Licensees should be able to make administrative changes and expect swift inspection to ensure WSLCB compliance without significant disruption to operations.

Serving size per package requirements	Currently individual packages of concentrates are limited to 1 gram however the legal purchase limit is 7 grams.	Allow products to be sold up to the legal purchase limit in one package to limit waste.
Waste Disposal Requirements	Waste disposal requirements are overly restrictive for a product that has very little THC including a quarantine period that is required before the waste can be disposed of.	Relax waste disposal requirements for producers/processors based on evaluation of whether the current quarantine requirement for waste is necessary to prevent diversion.
Sampling Rules	Sampling regulations are unreasonably restrictive and have not been updated since the regulated industry was in its infancy.	Update sampling rules at all levels so that processors don’t have to create entirely distinct product lines with distinct packaging and sizes in order to provide information and help create a knowledge base that is efficient and helps support customers.
Removal or increase of the lot size requirement for business to business sales if the product is intended for extraction or further refinement	Regulations require processors and producers to enter business to business transfers of product into 5 lb. lots for tracking purposes. During business to business transfers, product is not sold to retailers, and testing requirements are not applicable. Products will still receive testing in smaller lot sizes after the larger lot size is processed into an end product.	Increase or eliminate 5 lb. limits for business to business transfers to ease business functionality, reduce waste and increase accuracy within tracking and traceability.
Streamline Security Surveillance Requirements	No one disputes the need for robust security systems in cannabis businesses. But current surveillance requirements are overly burdensome and have not been updated in several years.	Update the requirements mandating the number of security cameras in production facilities and the required time a licensee must store video surveillance physically on the premises to reflect and support real-world enforcement practices.
Packaging and Labeling (PAL) Requirements for marijuana infused edibles (MIE)	As the cannabis market is expanding, brands are moving into different states. Washington’s restrictive MID PAL requirements force companies to change their branding, undermining the opportunity for the business and making WA an undesirable market to enter.	Bring packaging and labeling requirements to alignment with other states.